NAFTA Talks Take Acrimonious Turn

NAFTA Talks Take Acrimonious Turn

NAFTA Talks Take Acrimonious Turn

The fifth round, to be held in Mexico City, has been postponed until November 17-21. "To that end, the parties plan on having a longer inter-sessional period before the next negotiating round to assess all proposals", US Trade Representative Robert Lightizer told reporters on Tuesday while reading from a joint statement.

Talks to rewrite the North American Free Trade Agreement have stalled over tough American demands, dashing hopes that a deal can be reached this year.

"We have made some headway on the first objective, but even here we have sometimes seen a refusal to accept what is clearly the best text available in spite of the countries having agreed to it in the past", Lighthizer said.

For his part, Lighthizer identified both Canada and Mexico's "resistance to change" that manifested itself in a desire for "one-sided benefits". Things like digital trade, telecommunications and anticorruption still haven't been agreed upon.

"NAFTA has resulted in a huge trade deficit for the United States and has cost us tens of thousands of manufacturing jobs". At stake is the $1.2 trillion in annual trade between the three countries, as well as the business models of companies such as Ford Motor Co. and General Motors Co. that have adapted their supply chains to take advantage of the trade zone. Behind this profoundly misguided idea - which would wreak havoc on business planning - is another moronic fixed belief: that trade agreements should be judged on whether they result in a more favorable USA trade balance - in this case, after a five-year trial. "Negotiators will continue intersessional engagement, as well as intensive consultations with their respective stakeholders".

"It is also important to remember that to some extent, NAFTA is an investment agreement, and it is unreasonable to expect that the United States will continue to encourage and guarantee US companies to invest in Mexico and Canada primarily for export to the United States".

As taught in every freshman economics class, however, a nation's trade balance is nearly entirely governed by macroeconomic policies: To wit, if you don't save enough to pay for what you consume, you will run a trade deficit. The U.S. wants to limit companies' ability to appeal government decisions under NAFTA.

Lightizer was joined by the leaders of the other two delegations, Mexican Economy Secretary Ildefonso Guajardo and Canadian Foreign Minister Chrystia Freeland. "Without a doubt, there might be proposals in which we do not coincide". "It's a great deal for businesses that have decided they want to take advantage of the situation", Lighthizer said.

"None of us want to end this process empty-handed; and there is no reason for that", Villarreal said. "When 95 percent of consumers live outside the USA, if we aren't exporting, we're losing", Heitkamp said.

The government has frequently reminded the U.S. that 35 states and nine million American jobs depend on trade with Canada. "In some cases, these proposals run counter to World Trade Organization rules". "NAFTA partners are working hard to ensure the new agreement provides a solid framework to create jobs, economic growth and opportunity for the people of North America", Lighthizer said.

Freeland didn't dismiss the possibility of success but said she was ready "for the worst possible outcome". "And we certainly are". USA grain and meat producers have also said they fear that the produce seasonality proposal could endanger US exports to Mexico, and the United Fresh Produce Association has said it does not support the seasonality proposal even though its Florida members and some others want the situation addressed.

"New tariffs or trade barriers have the potential of disrupting these supply chains, which could raise costs for USA consumers and possibly make goods and services produced throughout North America less competitive in foreign markets", it points out.

In a recent note to clients, Edward Glossop, Latin America economist at Capital Economics, said the currency could tumble to at least 22 per dollar, but probably further, to about 22.50 or 23 per dollar if the trade deal were to collapse.

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